United States Government Accountability Office: Status of GAO's  
Human Capital Transformation Efforts (22-MAY-07, GAO-07-872T).	 
                                                                 
The subcommittees asked the Comptroller General of the United	 
States to discuss recent human capital reform efforts at the U.S.
Government Accountability Office (GAO). In 2004, GAO conducted	 
its first ever market-based compensation study after laying the  
necessary foundation by implementing a modern, competency-based  
performance management system. GAO hired a top compensation	 
consulting firm on a competitive basis to conduct a market-based 
pay study using generally accepted approaches and based on	 
independent and professional judgment. As a result of the study, 
the 2006 pay ranges for about 25 percent of GAO's employees were 
raised and about 10 percent of GAO's employees were determined to
be paid above market levels based on their roles,		 
responsibilities, and/or relative performance. No GAO employee	 
has had his or her pay cut as a result of GAO's classification	 
and compensation changes. Still, GAO's approach to market-based  
pay and related Band II restructuring efforts, which were very	 
challenging and likely unprecedented in government, have been the
source of considerable attention and some controversy.		 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-07-872T					        
    ACCNO:   A69832						        
  TITLE:     United States Government Accountability Office: Status of
GAO's Human Capital Transformation Efforts			 
     DATE:   05/22/2007 
  SUBJECT:   Comparative analysis				 
	     Employees						 
	     Human capital					 
	     Human capital management				 
	     Pay						 
	     Salary increases					 
	     Surveys						 
	     Performance management				 
	     Performance-based pay				 
	     GAO High Risk Series				 

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GAO-07-872T

   

     * [1]Organizational Results Measures
     * [2]People Measures: Attracting and Retaining Staff
     * [3]People Measures: Developing, Using, Leading, and Supporting Staff
     * [4]Excerpts from Case Studies and Articles Highlighting GAO's Human
       Capital System
     * [5]Disposition of Band II Staff Initially Placed in Band IIA on
       January 8, 2006 Projected Through 2012
     * [6]GAO's Ranking among Large Federal Agencies, by Demographic Group
     * [7]Examples of Employee Outreach Related to the Classification and
       Compensation Review and Band II Restructuring Efforts
     * [8]Comparison of GAO's 2007 Banded Salary Ranges with 2007 GS Levels
       (All Steps) for the Washington/Baltimore/ Northern Virginia Locality
       Area
     * [9]GAO Analyst and Related Staff Compared with the 2000 Civilian Labor
       Force (CLF) Data (Note: GAO data as of October 1, 2006)
     * [10]GAO's Diversity Profile among Senior Analysts, Assistant
       Directors, and SES Level
     * [11]GAO's Mission
     * [12]Obtaining Copies of GAO Reports and Testimony

          * [13]Order by Mail or Phone

     * [14]To Report Fraud, Waste, and Abuse in Federal Programs
     * [15]Congressional Relations
     * [16]Public Affairs

Testimony

Before Congressional Subcommittees

United States Government Accountability Office

GAO

For Release on Delivery Expected at 10:00 a.m. EDT

Tuesday, May 22, 2007

UNITED STATES GOVERNMENT ACCOUNTABILITY OFFICE

Status of GAO's Human Capital Transformation Efforts

Statement of David M. Walker, Comptroller General of the United States

GAO-07-872T

Chairman Akaka, Chairman Davis, and Members of the Subcommittees:

I appreciate the opportunity to appear before you today to discuss recent
human capital reform efforts at the U.S. Government Accountability Office
(GAO). As you know, GAO is in the performance and accountability business.
We try to improve economy, efficiency, effectiveness, ethics, and equity
within the federal government. I consider these important principles in
connection with all of my decision making relating to GAO. Furthermore,
because we are the ones who audit, investigate, and evaluate others, GAO
seeks to "lead by example" in every major management area, including the
human capital area. We are not perfect and we never will be, but we strive
to do what is right and to continuously improve.

Before I address our recent human capital changes, I would like to put
this issue in context. As you know, GAO put the issue of Human Capital
Strategy on our High-Risk List in 2001 as a governmentwide challenge. This
was due to a variety of factors including the following:

           1. the downsizing of government in the 1990s,
           2. hiring freezes in selected government agencies,
           3. skills and knowledge gaps in many agencies,
           4. governmentwide succession planning challenges, and
           5. outdated human capital policies and practices within the
           federal government.

Clearly the government's greatest asset is its employees. Such is
certainly the case at GAO. Therefore, all of our human capital reform
efforts need to be designed to attract and retain top talent within
current and expected resource levels.

Our recent transformation efforts at GAO, including our human capital
reforms, have been acclaimed by many and criticized by some. Such
criticism is not surprising, since transforming government is tough
business and most people don't like to change, especially when the change
may not be beneficial to them personally. This is especially true in
connection with major human capital reforms. At the same time, as
Comptroller General of the United States, I have a fiduciary and
stewardship responsibility to focus not just on today but also to do
what's right for tomorrow. This requires me, among other things, to focus
on what is in the collective best interest of all GAO's employees rather
than what might be in the narrow interest of some of GAO's employees. It
also requires me to consider which policies are appropriate to attract and
retain a topflight workforce while ensuring that such policies are both
affordable today and sustainable over the longer term.

With regard to our pay ranges, some of our employees have interpreted our
market-based pay determination as undervaluing their abilities and
contributions. Such is clearly not the case. GAO's workforce is highly
skilled and dedicated to our mission. We have over 3,000 valuable and
valued employees who work hard and make meaningful contributions to our
agency each and every day. We appreciate what each GAO employee does for
the Congress and the country. Our employees are working hard to make a
meaningful and lasting difference, and so am I.

The fact is when you are making tough transformational changes you cannot
make everybody happy. This is especially true when you are making changes
to an agency's classification and compensation systems. Nonetheless, it is
important for an agency's leadership to listen to the views of all
clients, employees, and other key stakeholders, and to seriously consider
all legitimate comments and concerns. At the same time, at the end of the
day, it is critically important for leaders to make difficult decisions
based on what they think is the right thing to do, even though it may not
be popular. This is the approach that we employ at GAO.

One aspect of our recent human capital changes is our movement to a more
market-based and performance-oriented pay system. Importantly, we are not
the only federal agency seeking to do so. As a result, I believe it is
important to compare what we have done and how we have done it to others
in order to provide context to your oversight and deliberations.

While our transformational human capital changes have required some
difficult adjustments, they, along with other key reforms, have helped us
to achieve record organizational results (see appendix I). Furthermore, we
have continued to achieve very positive results in connection with our key
people measures, including in connection with our annual employee feedback
survey (see appendices II and III). For example, based on the results of
our latest employee feedback survey, which was conducted after our
classification and compensation changes and Band II restructuring effort,
GAO was ranked number 2 among large federal employers in the most recent
"Best Places to Work in the Federal Government 2007" rankings.

Most employee concerns regarding our recent changes relate to the
implications of our moving to a more market-based, skills-, knowledge-,
and performance-oriented pay system. In 2004, we conducted our first ever
market-based pay study after laying the necessary foundation by
implementing a modern, competency-based performance management system. We
hired a top compensation consulting firm, Watson Wyatt, with extensive
public, private, and not-for-profit sector experience, through a
competitive process. Our related internal consultation effort involved a
variety of actions, including task teams, focus groups, "town hall
meetings," and meetings with our Employee Advisory Council. Watson Wyatt
conducted the market-based pay study using generally accepted approaches
and based on its independent and professional judgment. Importantly, for a
variety of reasons and at our request, the study did not consider employee
benefits in establishing pay ranges for GAO's employees. This resulted in
pay ranges that were somewhat higher than otherwise would have been the
case.

As a result of the study, the pay ranges for about 25 percent of our
employees were raised. In this regard, GAO's Executive Committee raised
several of the pay ranges proposed by Watson Wyatt to ensure our
competitiveness externally and to enhance equity internally. Importantly,
we did not lower any of the proposed ranges. This was good news for the
affected employees. However, the study also determined that while most
employees were paid within market ranges, about 10 percent of our
employees were paid above market levels based on their roles,
responsibilities, and/or relative performance. This was not good news for
the affected 10 percent, and some of them have been vocal in their related
complaints. As a result, our related restructuring efforts, which were
very challenging and possibly unprecedented in government, have been the
source of considerable attention and some controversy.

Our reforms, while very significant, are by no means perfect. Perfection
does not exist on this earth. We believe, however, that our actions have
been consistent with both the law and the important principles that I
outlined at the outset of my testimony. Our reforms also recognize the
need to modernize the federal government's human capital practices, given
21st century realities.

We believe we are the first major agency to implement broad banding;
market-based pay; and skills-, knowledge-, and performance-oriented pay
systems on an agencywide basis. As noted previously, this is a major
accomplishment, and our reforms have been the subject of many positive
case studies and articles by various organizations, academics, and others
on how to achieve tough transformation changes within the federal
government (see appendix IV). We are proud of what GAO has accomplished in
the human capital area, including our recent classification and
compensation system changes.

Nonetheless, as I have stated previously, in hindsight, I regret that
there were certain expectation and communication gaps that occurred in
connection with our initial implementation of market-based pay ranges and
related across-the-board pay adjustments in 2006. We have, however, taken
numerous steps to address this matter over the past year so that any such
gaps should no longer exist. Candidly, there is no easy way to tell people
that they are overpaid based on the market, their roles and
responsibilities, and possibly their relative performance. It is also
difficult to change from a system under which annual adjustments are
largely on autopilot to one that is more market- and performance-based.

At the same time, given the express statutory criteria that apply to GAO's
annual pay adjustments, our constrained budgets since 2003, and our
dedication to the principles of economy, efficiency, effectiveness,
ethics, and equity, we took steps that, as Comptroller General, I deemed
to be both prudent and necessary for GAO. Unfortunately, despite our
concerted and good faith efforts, there has been a lot of false or
misleading information circulated and reported about our classification
and compensation changes. In this regard, I'd like to set the record
straight in connection with several matters.

First and foremost, I know that some are concerned that I did not follow
through on certain assurances I made in 2003 during consideration of GAO's
Human Capital Reform Act, namely, that we would provide across-the-board
pay adjustments to GAO employees who received at least a "meets
expectations" rating. In late 2004, after we received the market- based
pay study, we were faced with the reality that some of our employees were
paid above market levels. This fact was not known when I testified in
2003. In retrospect, we should have advised the Congress and others sooner
that we did not view my prior statements as applying to employees who were
paid above market levels. I am sorry that we did not do that; however, the
fact remains that I did not believe then, nor do I believe now, that it
would be appropriate or equitable to provide across-the-board pay increase
to employees who are paid above market levels. The very notion that one
would provide across-the-board pay adjustments to those paid above market
is, in my opinion, fundamentally inconsistent with the very premise of a
market-based pay system and the concept of equal pay for work of equal
value. Again, while I regret that I did not clarify this point in a more
timely manner, I firmly believe that my exercise of judgment on this
matter has been fully consistent with the principles and criteria that
were under consideration in July 2003, when I testified, and that were
enacted into law in July 2004.

With regard to our recent Band II restructuring effort, the plain and
simple truth is that no GAO employee took a pay cut as a result of our
classification and compensation changes. Furthermore, all GAO employees
who were on board as of January 2006 were given the opportunity to earn
what they could have under the prior Band II pay system at the time of the
conversion

As you may know, GAO has a two-tiered annual pay adjustment system. The
first tier relates to the annual across-the-board pay adjustment that is
determined by the Comptroller General based on the statutory criteria that
I am required to consider; general market conditions; and certain other
factors (e.g., our budget). All employees who achieve a "meets
expectation" or higher rating on all applicable competencies and who are
paid within applicable market-based compensation limits, including
consideration of the Band IIB speed bump, receive this increase.^1 The
second tier is our supplemental performance-based compensation (PBC).
While the amount of this increase is also contingent on our budget, PBC is
based on how well an employee performs relative to his or her applicable
peer group.

While 308 GAO employees who performed at the "meets expectation" level or
better did not initially receive an across-the board-pay adjustment in
2006 because they were paid above market, this number decreased to 298 as
a result of the recent Personnel Appeals Board (PAB) settlement. Of this
number, only 47 employees did not receive any PBC for that year. Given
GAO's constrained budgets, the plain truth is that any funds allocated to
employees who are paid above market are funds that are not available for
allocation to employees who are not paid above market, who may be better
performers, and who may have more responsibility.

^1With regard to the speed bump, employees at the Band IIB level must meet
the criteria above, and they also must be in the top 50 percent of their
peer group if their salary exceeds the market-based speed bump. The speed
bump for staff at the Band IIB level is necessary, given the significant
degree of overlap in the salary ranges for Band IIB and Band III level
employees.

The number of employees who did not receive across-the-board pay
adjustments declined from about 10 percent of our total workforce in 2006
to about 5 percent in 2007. Furthermore, of the 139 employees who did not
receive across-the-board adjustments in 2007, only 2 did not receive any
PBC. Importantly, our limits on across-the-board pay adjustments for
certain Band IIA employees represent a temporary transition issue. As a
result, by the time that I leave office, we expect there no longer will be
any Band IIA employees performing at the "meets expectation level" or
better who do not receive an across-the-board pay adjustment (see appendix
V).

Some have asserted that morale at GAO is poor. This assertion is not
supported by the facts. While the morale of certain Band II employees
understandably went down in 2006 as a result of our Band II restructuring
effort, overall morale at GAO has risen by 33 percent from the levels when
I became Comptroller General. Furthermore, as noted previously, GAO was
recently ranked number 2 among all large federal agencies across
government in the "Best Places to Work in the Federal Government 2007"
rankings published by the Partnership for Public Service in cooperation
with American University. This ranking is based on the opinions of GAO
employees obtained after our classification and compensation changes and
Band II restructuring effort. Furthermore, GAO is also ranked highly by a
broad cross section of demographic groups (see appendix VI).

Contrary to assertions by some, GAO's rankings are based on responses to
the exact same questions as the ones used in the Office of Personnel
Management's (OPM) survey of executive branch agencies. Moreover, despite
what some have asserted, GAO employed an extensive outreach, employee
participation, and communication effort in connection with our
classification and compensation review and Band II restructuring effort.
We made a number of important adjustments to our approach based on
feedback we received from our employees. Our major agencywide efforts are
summarized in appendix VII. Many of these efforts involved a broad range
of GAO executives, including myself. The reality is that no matter how
many outreach and listening sessions we might have conducted, some
percentage of our employees would not have supported any proposed changes,
especially those individuals who were deemed to be paid above market.

Importantly, we have taken steps in the past year to provide additional
opportunities for pay increases to many employees. For example, all GAO
employees, including those who are paid above market levels, were eligible
for 100 percent of their PBC in 2007. In addition, all of their PBC was
added to their base pay up to applicable market-based pay limits. We have
also eliminated all pay range speed bumps other than the one applicable to
Band IIB employees. In addition, we will soon be submitting legislation
that will seek to enhance the pay and pension provisions applicable to our
employees. GAO's 2007 salary ranges, with comparisons to the most
applicable 2007 General Schedule (GS) ranges, are included in appendix
VIII.

Some have raised questions or criticized our market-based pay approaches
in ways that reflect a basic misunderstanding of how market-based pay
studies are conducted. These criticisms also reflect a lack of
understanding as to how the GS pay ranges are determined and updated.

Just because the GS system is widespread in the federal government and
persons have a better understanding of how they are likely to fare under
the system does not mean that it is appropriate, reflects modern
compensation practices, or that individuals are treated fairly based on
their skills, knowledge, and performance. On the basis of recent briefings
by officials from OPM and the Bureau of Labor Statistics (BLS), in my
view, the current GS system is outdated and is designed primarily to
reward length of service rather than performance. In addition, as we found
at GAO even before our Band II restructuring effort, performance
appraisals can be negatively correlated to pay for employees paid at the
cap for their applicable level.

Given the apparent widespread lack of understanding of the methodology
associated with establishing and updating the GS pay ranges, determining
related annual across-the-board pay adjustments, and other annual pay
adjustments, I believe there is a need to perform a review of the GS
system. I would like to do such a study at the request of your
subcommittees, but I am willing to do it under my statutory authority as
Comptroller General of the United States, if necessary. I look forward to
publishing the results of this work. In any event, we will keep you
informed as we conduct this work, and I hope that your subcommittees will
hold a hearing on the report after it is issued.

Some have questioned the degree of diversity in GAO's workforce. These
assertions do not stand up based on a comparison of GAO's workforce to
applicable civilian labor force data (see appendix IX), nor are they valid
based on the change in GAO's diversity profile over time (see appendix X).
As I have stated on many occasions, GAO is committed to maintaining a
diverse and high performing workforce with equal opportunity for all and
zero tolerance for discrimination of any type. We take a number of
affirmative steps and incorporate a number of important safeguards in
relation to all major human capital decisions to help ensure that we
achieve this important goal. Our recent decision to voluntarily contract
for an independent assessment of African-American employees' performance
ratings is unprecedented and serves to demonstrate our commitment in this
area.

Finally, on May 8, 2007, the International Federation of Professional and
Technical Engineers (IFPTE) filed a petition with the PAB to start the
process to organize and represent certain GAO employees. As I have said on
numerous occasions, I support the rights of our employees to organize and
have taken steps to ensure that GAO's management complies with applicable
labor laws. We are willing to support a timely election. However, GAO will
challenge any attempts by the union to organize supervisory or
confidential personnel. Ultimately, the PAB will be required to decide any
issues that are in dispute. We hope that this matter can be resolved in a
professional and expeditious manner.

In closing, GAO's leadership team is committed to continuous improvement
while avoiding constant change. As I said before, GAO is not perfect and
it never will be. We are, however, a leader in transforming many
management areas within the federal government, including the human
capital area. We are proud of this fact and plan to do everything that we
can, in partnership with our clients and employees, to stay that way.

Thank you for your time and attention. I would be happy to answer any
questions that you may have.

Appendix I

Organizational Results Measures

Measures                                 Fiscal Year 1998 Fiscal Year 2006 
Financial benefits (billions of dollars)            $19.7          $51.0^a 
Nonfinancial   benefits    (number    of              537            1,342 
actions)                                                                   
Past recommendations implemented                      69%              82% 
New products with recommendations                     33%              65% 

Source: GAO.

Note: Additional years of data are available for comparison. See GAO,
Performance and Accountability Report, Fiscal Year 2006, GAO-07-2SP
(Washington, D.C.: November 15, 2006).

^a$51 billion dollars represents a $105 return on every dollar the
Congress invests in GAO.

Appendix II

People Measures: Attracting and Retaining Staff

Measures                           Fiscal year 2002^a Fiscal year 2006 
New hire rate                                     96%              94% 
Acceptance rate                                   81%            70%^b 
Retention rate with retirements                   91%              90% 
Retention rate without retirements                97%              94% 

Source: GAO.

Note: Additional years of data are available for comparison. See GAO,
Performance and Accountability Report, Fiscal Year 2006, GAO-07-2SP
(Washington, D.C.: November 15, 2006).

^aFiscal year 2002 was the first year in which GAO publicly reported all
four of these people measures for trend purposes. Prior to fiscal year
2002, data were not collected for either the new hire rate or the
acceptance rate.

^bThe acceptance rate was lower in fiscal year 2006 due, in large part, to
the uncertainty of our appropriation, which affected our ability to make
hiring offers in a timely manner.

Appendix III

People Measures: Developing, Using, Leading, and Supporting Staff

Measures               Fiscal year 2002 Fiscal year 2006 
Staff development                   71%              76% 
Staff utilization                   67%              75% 
Leadership                          75%              79% 
Organizational climate              67%              73% 

Source: GAO.

Notes: These measures are based on responses to selected questions in
GAO's annual employee feedback survey, which was revised in 2002 to
reflect GAO's organizational realignment. While GAO conducted annual
employee feedback surveys prior to 2002, these prior instruments are not
comparable in their content or design.

Additional years of data are available for comparison. See GAO,
Performance and Accountability Report, Fiscal Year 2006, GAO-07-2SP
(Washington, D.C.: November 15, 2006).

Appendix IV

Excerpts from Case Studies and Articles Highlighting GAO's Human Capital
System

Published source                Excerpted text                             
The IBM Center for The Business    o "The interest in pay banding derives  
of Government                      in substantial part from the            
                                      flexibility paybanding affords managers 
"Designing and Implementing        in matters of pay and classification.   
                                      There is widespread agreement among     
Performance-Oriented Payband       those who have examined compensation    
                                      practices in the federal government     
Systems"                           that the approach embodied by the       
                                      traditional General Schedule (GS) is    
James R. Thompson                  obsolete. A common complaint is that    
                                      the system is too rigid and that the    
Associate Professor                15-grade structure induces excessive    
                                      attention to minor distinctions in      
Graduate Program in Public         duties and responsibilities that can    
                                      affect how a position is classified."   
Administration                     o "Another concern is that pay          
                                      increases are granted largely on the    
University of Illinois at          basis of longevity rather then          
Chicago                            performance."                           
                                      o "The GAO and DoD systems link the pay 
May 2007                           of their employees more explicitly to   
                                      the market then do the systems in the   
                                      other agencies. The intent is both to   
                                      insure that they can compete for talent 
                                      and to avoid paying more than is        
                                      necessary to get the talent."           
                                      o "GAO has the most sophisticated of    
                                      the eight systems reviewed here."       
                                      o "GAO's system is one of only two that 
                                      are explicitly market-based. GAO        
                                      determines a `competitive pay rate,'    
                                      which represents the market median for  
                                      positions within each band. The amount  
                                      of performance-based compensation is    
                                      calculated as a percentage of the       
                                      competitive pay rate."                  
                                      o "The standardization of rating        
                                      averages by pay groups, which makes     
                                      rating consistency across groups less   
                                      important and which de facto identifies 
                                      relative levels of performance within   
                                      each group."                            
                                      o "Similar to GAO, at the Navy          
                                      Demonstration Project, the link between 
                                      the overall rating and the pay increase 
                                      is direct; no additional intervention   
                                      by the supervisor is required at the    
                                      pay setting stage."                     
                                      o "GAO follows a private sector         
                                      practice by conducting surveys to       
                                      determine the market rate for each      
                                      occupational group."                    
                                      o "Of the eight systems reviewed here,  
                                      only GAO's is market-based: Salaries    
                                      are periodically adjusted according to  
                                      compensation levels for similar         
                                      positions in the private sector."       
                                      o "Several of the agencies included in  
                                      this study use boards of senior         
                                      managers to review ratings across       
                                      units. GAO's system, on the other hand, 
                                      does not assume or require rating       
                                      consistency. The standardized rating    
                                      score on which each employee's pay      
                                      increase is based is a function of      
                                      relative performance within each        
                                      employee's work group."                 
                                      o "GAO does not use pay pools.          
                                      Adjustments to ensure that salary costs 
                                      stay within budgeted amounts occur only 
                                      at the top. The comptroller general     
                                      determines both the `annual adjustment' 
                                      analogous to the general pay increase   
                                      received by GS employees and the        
                                      `budget factor,' which figures          
                                      prominently in the calculation of       
                                      individual performance-based            
                                      compensation increases."                
Harvard Business Review            o "The Government Accountability        
                                      Office, or GAO, which investigates      
"Change Management in              other federal agencies and issues       
Government"                        reports on their performance, adopted   
                                      many of the talent-management practices 
Frank Ostroff                      found in the private sector."           
                                      o "To encourage GAO staffers to embrace 
May 2006                           new procedures, Walker focused on       
                                      incentives. GAO had been a place where  
                                      almost all employees received pay       
                                      increases largely on the basis of time  
                                      on the job and job classification or    
                                      grade, regardless of performance. Now,  
                                      compensation is structured on           
                                      market-based salary ranges, and         
                                      employees are rewarded for expertise,   
                                      leadership, increased responsibility,   
                                      and other contributions to              
                                      performance."                           
                                      o "At GAO, for example, David Walker    
                                      began by talking with Congress and the  
                                      agency's two key internal groups- the   
                                      agency's managing directors and the 25  
                                      employee representatives who sit on the 
                                      Employees' Advisory Council. `We talk   
                                      about what we need to do. I discuss it  
                                      with them live so that they can provide 
                                      input and ask questions.'"              
                                      o "As Walker puts it, `I find that      
                                      often you have more flexibility than    
                                      people believe. Many rules, as well as  
                                      civil service limitations on what you   
                                      can and can't do, are good, and they    
                                      need to be followed. But there is a     
                                      difference between what you can and     
                                      can't do and what has been done and not 
                                      done in the past.' As reported by GAO,  
                                      during Walker's tenure, that agency has 
                                      roughly doubled savings achieved and    
                                      resources freed up from $19 billion per 
                                      year to $40 billion at other agencies   
                                      as a result of its recommendations."    
IBM Center for the Business of     o "Many close observers of federal      
                                      personnel systems believe GAO has a     
Government                         significant amount to offer in          
                                      answering questions around public       
The Transformation of the          sector human capital reform. `GAO is    
Government                         worth paying attention to,' says Steve  
                                      Nelson, director of the Office of       
Accountability Office: Using       Policy and Evaluation at the Merit      
Human                              Systems Protection Board. `They've been 
                                      well ahead of other federal agencies in 
Capital to Drive Change            implementing changes, including large   
                                      ones like pay for performance and going 
Jonathan Walters                   to market based pay.'"                  
                                      o "Nobody interviewed for this report   
Governing Magazine                 complained about being underpaid;       
                                      indeed many staff said that the         
Charles Thompson                   combination of interesting work and     
                                      decent pay and benefits made GAO a very 
IBM Business Consulting            attractive place to be."                
Services                           o Remarks attributed to Colleen Kelly,  
                                      President of the National Treasury      
July 2005                          Employees Union regarding GAO's human   
                                      capital transformation: `If the         
                                      administration were really sincere      
                                      about improving human capital           
                                      management, they would pay closer       
                                      attention to what's gone on at GAO.'"   
Partnership for Public Service     o "GAO has some of the best analytical  
                                      talent in the country. More then 60     
Case Study "GAO: Leading by        percent of its 3,000-plus employees     
Example"                           have master's degrees and PhDs, and     
                                      their expertise covers the entire range 
November 5, 2003                   of federal government programs."        
                                      o "GAO's strategic objectives and       
                                      annual operating objectives are now     
                                      strongly linked to its performance      
                                      appraisal system through the use of a   
                                      competency approach as the centerpiece  
                                      of its performance management and all   
                                      other human capital systems."           
                                      o "In GAO's performance management      
                                      process, the employee is front and      
                                      center. They are expected to play an    
                                      active role in defining their annual    
                                      goals and performance expectations.     
                                      Moreover, employees' self-assessments   
                                      of their own performance serve as the   
                                      starting point for formal evaluations." 
                                      o "After the close of the first year    
                                      under the new system, GAO gathered      
                                      feedback from its Employee Advisory     
                                      Council and Managing Directors about    
                                      the results of the first performance    
                                      appraisal and management cycle. Based   
                                      on that feedback, several important     
                                      improvements to the system were made to 
                                      continue the change process."           
Government Leader                  o "Walker's overhaul of GAO's job       
                                      classification and employee appraisal   
"Walker takes GAO from             systems links pay to market forces and  
accounting to accountability"      raises to job performance. Broad pay    
                                      bands have replaced the regimented      
John Pulley                        General Schedule, which was created in  
                                      1949 to manage a largely clerical       
May 14, 2007                       federal workforce. The results is the   
                                      most far-reaching overhaul of pay and   
                                      job classification that any agency of   
                                      the federal government has undertaken." 
                                      o Remarks attributed to John Palguta,   
                                      Vice President of Policy at the         
                                      Partnership for Public Service: `At a   
                                      time when 70 percent of federal jobs    
                                      are professional or administrative,     
                                      linking pay to performance and          
                                      rewarding high achievers is overdue.    
                                      Kudos to GAO for trying to              
                                      demonstrate--very personally and very   
                                      aggressively--that this should be the   
                                      compensation system of the future. It's 
                                      a bold move on the part of GAO, and it  
                                      has caused some consternation within    
                                      the agency.'"                           
                                      o Remarks attributed to Elizabeth       
                                      Singer, a member of GAO's Employee      
                                      Advisory Council: "The critics are very 
                                      intense, very vocal, very angry, very   
                                      bitter, but they do not represent the   
                                      majority opinion.''"                    
                                      o Remarks attributed to Robert Tobias,  
                                      Director of American University's       
                                      Institute for the Study of Public       
                                      Policy Implementation: `If I'm in the   
                                      executive branch and I'm an appointee,  
                                      my focus is on creating public policy,  
                                      not implementing it. The Washington     
                                      Post focuses on fights in Congress, not 
                                      on agencies that do good work. A        
                                      sustained, focused attention on public  
                                      policy implementation was not present   
                                      until Walker came on the scene.'"       
FCW.COM                            o "In response [to allegations that     
                                      GAO's survey did not include the same   
"A question of ranking"            questions posed to other executive      
                                      branch employees], Robert Tobias,       
Richard W. Walker                  director of the Institute for the Study 
                                      of Public Policy Implementation, said,  
May 2007                           `That is not accurate. The three        
                                      questions in the GAO survey that we     
                                      used to provide an overall ranking [for 
                                      the Best Places to Work in the Federal  
                                      Government ranking] were the exact same 
                                      questions that were used in the federal 
                                      human capital survey.'"                 
Mike Causey's Federal Report       o "GAO has ruffled lots of feathers in  
                                      its day doing its duty. But most people 
May 9, 2007                        conceded it is one of, if not, the best 
                                      run operations in government. But even  
                                      in the best places, not all the troops  
                                      are always happy."                      
                                      o "Washington attorney Bill Bransford   
                                      says the small number of complaints may 
                                      be an indication that GAO has a winner. 
                                      Comptroller General David Walker said   
                                      the PFP [pay for performance] system    
                                      must have reviews and a safety valve,   
                                      and Bransford, whose firm specializes   
                                      in helping feds in trouble, says `it    
                                      appears to be a good program.'"         
                                      o "Anyhow after the dust settles, it is 
                                      likely that GAO will turn out to have   
                                      the best PFP system in government. It's 
                                      a highly-trained, motivated place with  
                                      lots of talented people and a boss,     
                                      Comptroller General David Walker, who   
                                      has a number of strengths."             
Partnership for Public Service     o "We know that the GS [General         
                                      Schedule] pay system and the            
Written Testimony of Max Stier     traditional performance management      
                                      system is in need of reform by          
President and CEO, Partnership     listening to federal employees          
for                                themselves. In OPM's 2006 Federal Human 
                                      Capital Survey, to which over 50,000    
Public Service                     DOD civilian employees responded, less  
                                      than one-third (31 percent) agreed that 
Prepared for the House             `In my work unit, differences in        
Committee on                       performance are recognized in a         
                                      meaningful way.'"                       
Armed Services Subcommittee on                                             
Readiness hearing: "The                                                    
National Security Personnel                                                
System: Is it Really Working?"                                             
                                                                              
March 6, 2007                                                              
Government Leader                  o "There have been pockets of success:  
                                      at the Federal Aviation Administration, 
"Pay for the Right Results"        the IRS, the National Institute of      
                                      Standards and Technology and the        
Wyatt Kash                         Government Accountability Office. Each  
                                      demonstrated that progressive           
January 13, 2006                   leadership could break the chains of    
                                      the General Schedule system and attract 
                                      and retain the talent government needs. 
                                      Indeed, more then 90,000 federal        
                                      workers are now in some form of         
                                      performance-based pay system."          
                                      o "GAO and its chief, David Walker, are 
                                      widely credited these days with doing   
                                      the job right. Critics quickly dismiss  
                                      GAO for having some distinct            
                                      advantages: its workforce is small,     
                                      relatively homogenous and highly        
                                      educated. But the lessons of GAO--and   
                                      the principled approach of comptroller  
                                      general Walker... offer important       
                                      leadership examples worth emulating."   
Federal Times                      o "GAO's first, and possibly most       
                                      important, step was to institute a      
"GAO's Worthy Example"             credible performance appraisal          
                                      system--three to four years before it   
November 28, 2005                  attempted to tie performance to pay.    
                                      Having established that system during   
                                      the three years that followed, the      
                                      agency is now ready to tie that system  
                                      to pay raises."                         
                                      o "GAO leaders also avoided making      
                                      decisions by fiat. Walker invited       
                                      employee input at open meetings,        
                                      through advisory councils and by        
                                      circulating draft plans that invited    
                                      comments. Employee suggestions were     
                                      then incorporated into the final plan." 

Source: GAO synthesis of published sources, as noted.

Appendix V

Disposition of Band II Staff Initially Placed in Band IIA on January 8,
2006 Projected Through 2012

Notes: Figures represent staff counts going into the annual adjustment and
PBC process each January after the salary ranges have been adjusted
upward. Thus, staff in the IIT range are those who would receive no annual
adjustment that cycle.

Calculations assume 3.19 percent annual adjustments; 3.19 percent salary
range growth; 2.15 percent PBC (with 75/25 allocation); and current IIT
rules.

The actual transition period could be shorter if persons are placed in
Band IIB before the adjusted pay cap for Band IIA catches up to the Band
IIT cap.

Appendix VI

GAO's Ranking among Large Federal Agencies, by Demographic Group

Demographic category Ranking 
Overall                    2 
African-American           2 
Hispanic                   2 
Asian                      6 
Female                     2 

Source: GAO.

Appendix VII

Examples of Employee Outreach Related to the Classification and
Compensation Review and Band II Restructuring Efforts

2002         o                                                             
August       o Employee Advisory Council and Executive Committee conduct   
                regular quarterly meeting: begin to discuss the feasibility   
                of splitting the Band II level.                               
December     o Employee Advisory Council and Executive Committee conduct   
                regular quarterly meeting: discuss the role of the EAC in     
                future discussions of splitting the Band II level. Also       
                discuss that the project will not get under way until         
                calendar year 2003 and that no changes are expected until     
                2004.                                                         
2003         o                                                             
April        o Executive Committee conducts three town hall forums with    
                Band II staff to discuss human capital reforms.               
                o Explanation for Human Capital II legislation posted to GAO  
                Intranet for all employees.                                   
May          o Questions and Answers document for Human Capital II         
                legislation posted to the GAO Intranet for all employees.     
June         o Memo on proposed reforms to the performance management      
                system, based on Employee Advisory Council and Managing       
                Directors' feedback, posted to the GAO Intranet for all       
                employees.                                                    
September    o Employee Advisory Council and Executive Committee conduct   
                quarterly meeting: discuss the distinction between jobs       
                performed at the Band II level.                               
December     o Employee Advisory Council and Executive Committee conduct   
                quarterly meeting: discuss status of congressional action     
                related to Human Capital II legislation; note that a project  
                team (Band II Advisory Group) had been formed to study the    
                Band II split, with EAC representation, and that the earliest 
                the split will happen will be October 1, 2004.                
2004         o                                                             
January      o Comptroller General conducts "CG Chat:" discusses the       
                planned split of the Band II level into two bands--one for    
                those who act as Analysts-in-Charge on a recurring basis and  
                one for those who function primarily as Senior Auditors,      
                Analysts, and Investigators, and occasionally serve as        
                Analysts-in-Charge.                                           
                o Detailed work plan on Band II restructuring posted to the   
                GAO Intranet for all employees.                               
February     o Employee Advisory Council and Executive Committee conduct   
                quarterly meeting: discuss the reasons for the proposed Band  
                II split and note that the split likely will occur between    
                October 2004 and January 2005.                                
                o Executive Committee conducts special town hall forum with   
                Band II staff.                                                
                o Executive Committee conducts meeting with Advisory Group on 
                Band II restructuring.                                        
March        o Executive Committee conducts special town hall forum with   
                Band I population on Band II restructuring.                   
                o Executive Committee conducts special town hall forum with   
                Band IIs to discuss the compensation and classification       
                review.                                                       
April        o Comptroller General conducts "CG Chat:" discusses the       
                upcoming classification and compensation review; how it       
                evolved from the "Band II split;" and its underlying          
                objectives, principles, processes, and time frames.           
May          o Employee Advisory Council and Executive Committee conduct   
                quarterly meeting: discuss the status of the Band II Advisory 
                Committee's efforts and the fact that the group will not meet 
                again until the Classification and Compensation Review (CCR)  
                is complete (planned for summer 2004), note that January 2005 
                will be the earliest date for implementing any CCR results,   
                and add that no employee's pay would be cut, including        
                locality pay. Employee Advisory Council members asked to      
                provide input by June 2004 on the kinds of organizations that 
                GAO should consider for pay comparison.                       
July         o Comptroller General conducts "CG Chat:" provides a status   
                report on the CCR.                                            
                o Contract awarded to Watson Wyatt for compensation study.    
August       o Watson Wyatt briefs the Managing Directors.                 
                o Watson Wyatt briefs the Employee Advisory Council.          
                o Watson Wyatt conducts approximately 35 hours' worth of      
                meetings with Career Stream Focal Points.                     
September    o Comptroller General conducts "CG Chat:" discusses CCR and   
                notes that starting with the next pay adjustment for          
                Analysts, Attorneys, and Specialists, all pay categories will 
                be eliminated and all performance-based pay increases will be 
                made on an individual-by-individual basis.                    
October      o Employee Advisory Council and Executive Committee conduct   
                quarterly meeting: discuss the hiring of Watson Wyatt to      
                start the CCR and note that the study is expected to be       
                completed by the end of the month.                            
                o Comptroller General conducts "CG Chat:" discusses           
                performance appraisal and pay issues.                         
                o Watson Wyatt briefs employees on compensation design        
                elements.                                                     
November     o Watson Wyatt conducts meeting with the Executive Committee  
                and Managing Directors on GAO's adaptation of their findings. 
December     o Comptroller General conducts "CG Chat:" shows briefing      
                slides to explain how GAO will use Watson Wyatt's findings to 
                determine salaries for Analysts, Attorneys, and Specialists.  
2005         o                                                             
January      o Comptroller General conducts "CG Chat:" explains how pay    
                adjustments will be made; explains methods used to calculate  
                2005 performance based compensation increases for Analysts,   
                Attorneys, and Specialists; explains the concept of           
                standardized rating scores.                                   
April        o Employee Advisory Council and Executive Committee conduct   
                quarterly meeting: discuss a future briefing for the Employee 
                Advisory Council by the end of April on the proposed plan for 
                updating the roles of Band IIA/IIB; the selection criteria;   
                and the process for initial placement. Also request that the  
                Employee Advisory Council nominate three of its members to    
                serve on a GAO-task team related to Band II restructuring     
                that will convene in May.                                     
May          o Comptroller General conducts "CG Chat:" reviews plans for   
                next year's pay adjustments for Analysts, Attorneys, and      
                Specialists; announces plans for placing Band II staff        
                members in IIA and IIB salary ranges, establishing a career   
                path for Written Communications Specialists, and developing a 
                process for Communications Analysts to transfer to Band IIA   
                analyst positions. CG also released a project plan to (1)     
                make the initial placements to implement the Band IIA and     
                Band IIB market-based compensation ranges, (2) establish a    
                career path for Written Communications Professionals, and (3) 
                provide a process through which Communications Analysts may   
                apply for a transfer to generalist analyst positions at the   
                Band IIA level.                                               
                o Project plan for Band II restructuring posted to the GAO    
                Intranet for all employees.                                   
June         o Project plan and announcement of employee task teams'       
                creation to study and develop proposals to implement Band IIA 
                and IIB market-based compensation ranges for Analysts and     
                Specialists posted to the GAO Intranet for all employees.     
July         o Executive Committee and Employee Advisory Council conduct   
                quarterly meeting: discuss topics for July 15, 2005, "CG      
                Chat" and provide an update on the Band II restructuring      
                effort.                                                       
                o Comptroller General conducts "CG Chat:" notes that the      
                Executive Committee will review reports from the task teams   
                established to develop recommendations for the roles and      
                responsibilities of Band II Analysts, Specialists, and        
                Communications Professionals.                                 
                o "Phase I" draft proposals for identifying the IIA and IIB   
                roles and responsibilities for Analysts and Specialists and a 
                career track for Written Communications Professionals posted  
                to the GAO Intranet for all employees for comment.            
August       o Executive Committee conducts special town hall meetings     
                with all staff on Analyst proposals.                          
                o Executive Committee conducts special town hall meetings     
                with all staff on Attorney proposals.                         
                o Executive Committee conducts special town hall meetings     
                with all staff on Specialist proposals.                       
                o Notice announcing that focus groups are forming to discuss  
                "Phase II" proposals for implementing Band IIA and IIB        
                market-based compensation ranges for Band II Analysts and     
                Specialists (to be effective January 2006) posted to the GAO  
                Intranet for all employees.                                   
September    o Draft Band II restructuring "Phase II" proposals for        
                identifying the criteria and process for placing Analyst and  
                Specialist staff in the IIB pay range posted on the GAO       
                Intranet for all employees for comment.                       
                o Notice posted to the GAO Intranet for all employees         
                announcing the availability on the Intranet of the Band II    
                Restructuring roles and responsibilities for Senior       
                Analysts in the IIA and IIB pay ranges , Specialists in   
                the IIA and IIB pay ranges , and Communication Analysts   
                in the Band I and II pay ranges .                             
October      o Questions and Answers document on the Band II restructuring 
                posted to the GAO Intranet for all employees.                 
                o Draft GAO Order on the Band II Restructuring ,          
                containing the latest "Phase I" roles and responsibilities    
                and additional information about the "Phase II" straw         
                proposal regarding the criteria and process for initial IIB   
                pay range placement, posted to the GAO Intranet for all       
                employees to comment.                                         
                o Executive Committee and Employee Advisory Council conduct   
                quarterly meeting: CG notes that not many comments were       
                received on "Phase I" (roles and responsibilities) of the     
                Band II restructuring effort and reminds EAC members that the 
                GAO order on "Phase II" (criteria and process) is currently   
                out for comment.                                              
                o Notice posted to the GAO Intranet for all employees         
                announcing the extension of the comment period for the draft  
                GAO order on the Band II restructuring.                       
November     o Executive Committee conducts special meeting with Managing  
                Directors on Band II restructuring.                           
                o Comptroller General conducts "CG Chat:" announces the kick  
                off of an accelerated process for placing current Band II     
                staff members in the IIA and IIB pay ranges by announcing     
                final decisions on the criteria and process to be used and    
                announces decisions about 2006 pay rates for Analysts,        
                Attorneys, and Specialists, with a warning that they were     
                contingent on GAO's final budget.                             
                o Notice posted to the GAO Intranet for all employees         
                announcing the availability on the GAO Intranet of the slides 
                used in the previous day's "CG Chat."                         
                o Draft GAO order related to GAO's administrative grievance   
                procedure, updated to include information related to the      
                restructuring of Band II, posted to the GAO Intranet for all  
                employees to comment.                                         
                o Notice posted to the GAO Intranet for all employees         
                announcing changes in eligibility requirements found in the   
                restructuring order and changes in the dates that Band IIB    
                selection panels would convene.                               
                o Questions and Answers document on the Band II restructuring 
                for "Phase II" posted on the GAO Intranet for all employees.  
December     o Band IIB selection panels convene.                          
                o Staff noncompetitively placed in Band IIB are notified of   
                their selection.                                              
                o Information describing the Band IIB reconsideration process 
                posted to the GAO Intranet for all employees.                 
2006         o                                                             
January      o Effective date of reassignment for staff placed in IIB.     
                o Notice posted to the GAO Intranet for all employees to      
                comment announcing the procedures for Band IIB Placement      
                Reconsideration Requests.                                     
                o Notice posted to the GAO Intranet for all employees to      
                comment clarifying the status of Criminal Investigators       
                (series 1811) as a result of the recent Band II               
                restructuring.                                                
                o Comptroller General conducts "CG Chat:" reviews results of  
                Band IIB placements and notes that there will be other        
                opportunities for competitive placement in Band IIB--the next 
                one by the end of June and conducted at the same time as the  
                Band IIA promotion process; announces that a proposed         
                procedure for current Communication Analysts and PT-II staff  
                members to apply for certification as Band IIA Analysts, as   
                recommended by a special employee task force, will soon be    
                posted for comments. Notes that--based on the employee task   
                team's work--the Executive Committee decided not to employ a  
                certification process for moving staff from Band I to Band    
                IIA, meaning that for the time being, the process will remain 
                competitive and there will be no speed bump in the IIA pay    
                range.                                                        
                o Executive Committee and Employee Advisory Council conduct   
                quarterly meeting: Employee Advisory Council members raise    
                concerns about how the selection criteria for the Band IIB    
                position were applied, inquires about how future rounds of    
                placements will be conducted, and notes the perceived         
                decrease in staff morale as a result of the restructuring.    
                Discusses the employee task forces' work related to a         
                certification process for Communication Analysts and APSS     
                staff interested in converting to Analyst positions.          
                o In response to issues raised by the Employee Advisory       
                Council, a memo providing additional information on the Band  
                II restructuring process; Personnel Appeals Board and GAO's   
                Office of Opportunity and Inclusiveness appeals processes and 
                filing deadlines; Managing Director feedback on central panel 
                results; and other related issues is posted to the GAO        
                Intranet for all employees.                                   
                o Staff who applied for reconsideration to be placed in IIB   
                are notified of decisions.                                    
February     o Comptroller General conducts "CG Chat:" reviews the results 
                of Band IIB reconsideration and discusses the rationale for   
                recalculating standardized rating scores to determine the     
                amount of performance-based pay for Band IIA and IIB staff    
                members.                                                      
                o Employees file petitions with the Personnel Appeals Board   
                on Band II restructuring.                                     
April        o Executive Committee and Employee Advisory Council conduct   
                quarterly meeting: Employee Advisory Council members          
                summarize the results of their Band II outreach effort and    
                all parties discuss possibilities for how and when to post    
                the list of staff placed in IIB; discuss the process for      
                future rounds of IIB placement.                               
                o Question and Answer document on the Band II restructuring   
                posted to the GAO Intranet for all employees.                 
May          o Notice of the implementation of a uniform appraisal cycle   
                for Analysts and Specialists, based on feedback from the      
                Employee Advisory Council and the Managing Directors, posted  
                to the GAO Intranet for all employees.                        
                o Revisions to Band IIB Performance Appraisal Standards       
                posted to the GAO Intranet for all employees to comment.      
July         o Comptroller General conducts "CG Chat:" announces that      
                subject to budget constraints, the Executive Committee is     
                considering various proposals: all GAO staff, regardless of   
                their salary level and their position within their pay band,  
                will be eligible to receive their full performance-based      
                compensation (currently, staff who are at or above their      
                applicable pay cap are not eligible for PBC). Notes that the  
                minimum merit percentage could be set at greater than 50      
                percent (current guidelines call for 50 percent of PBC to be  
                paid in merit or base pay). Also announces that speed bumps   
                will be eliminated in all pay ranges for both mission and     
                APSS staff, except for Band IIB. Notes that GAO staff will be 
                provided an opportunity to review and comment on these        
                proposals before they are implemented. Reviews results from   
                the first round of IIA and IIB placements following the       
                initial restructuring effort.                                 
                o Executive Committee and Employee Advisory Council conduct   
                quarterly meeting: review the proposed enhancements to the    
                compensation system that were discussed in the prior day's    
                chat.                                                         
October      o Executive Committee and Employee Advisory Council conduct   
                quarterly meeting: discuss rating periods for staff recently  
                placed in IIB.                                                
2007         o                                                             
April        o The PAB cases, filed in February 2006 regarding the Band II 
                restructuring and involving 12 employees, are resolved via    
                settlement.                                                   
May          o Watson Wyatt briefs the Employee Advisory Council.          

Source: GAO.

Appendix VIII

Comparison of GAO's 2007 Banded Salary Ranges with 2007 GS Levels (All
Steps) for the Washington/Baltimore/ Northern Virginia Locality Area

GAO        GAO GAOcompetitive GAOspeed                         GS ranges(all steps 
band   minimum           rate     bump       GAO maximum             within grade) 
I^a    $42,900        $60,600      N/A           $78,200 $37,640--$86,801(GS 7-12) 
IIA /  $71,900        $88,300      N/A $104,700/$118,700  $79,397--$103,220(GS-13) 
IIT^b        /                                                                     
       $77,400                                                                     
IIB    $84,600       $108,400 $121,600          $132,200  $93,822--$121,967(GS-14) 
III   $107,200       $117,500      N/A          $143,471 $110,363--$143,471(GS-15) 

Source: GAO and OMB.

^aAnalyst ranges only. Does not include ranges for IT Analyst, Financial
Auditor, or Communication Analyst positions.

^bIIT is not a separate band, but rather a separate classification of
staff with unique salary circumstances.

Appendix IX

GAO Analyst and Related Staff Compared with the 2000 Civilian Labor Force
(CLF) Data (Note: GAO data as of October 1, 2006)

                         African        Asian                                  
                         American                  Hispanic        Women       
                Total                                                          
GAO            GAO   % in   % in   % in   % in  % in  % in    % in   % in   
occupations  staff    CLF    GAO    CLF    GAO   CLF   GAO     CLF    GAO   
Analyst      1,816  5.87% 11.78%  5.71%  7.38% 3.58% 5.23%  38.61% 54.24%   
Auditor        239  7.89% 13.81%  8.06% 11.72% 5.13% 7.11%  57.02% 53.56%   
Computer                                                                    
sci/telecomm   115  7.83% 13.91% 10.79% 19.13% 4.70% 6.09%  33.23% 50.43%   
All other                                                                   
analyst                                                                     
related^a      256  7.98% 14.84%  9.63%  6.25% 5.05% 1.95%  39.62% 39.84%   
Total        2,426  6.62% 12.41%  6.81%  8.24% 4.13% 5.11%  43.24% 52.47%   

Source: GAO.

^aIncludes occupations like Economists, Financial Analysts, Criminal
Investigators, Statisticians, and other specialists with as few as 1 GAO
employee.

Appendix X

GAO's Diversity Profile among Senior Analysts, Assistant Directors, and
SES Level (Note: scales on vertical axes differ, reflecting the
differences in representation for each group)

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Highlights of GAO-07-872T, a testimony before Congressional Subcommittees

May 22, 2007

UNITED STATES GOVERNMENTACCOUNTABILITY OFFICE

Status of GAO's Human Capital Transformation Efforts

The subcommittees asked the Comptroller General of the United States to
discuss recent human capital reform efforts at the U.S. Government
Accountability Office (GAO). In 2004, GAO conducted its first ever
market-based compensation study after laying the necessary foundation by
implementing a modern, competency-based performance management system. GAO
hired a top compensation consulting firm on a competitive basis to conduct
a market-based pay study using generally accepted approaches and based on
independent and professional judgment. As a result of the study, the 2006
pay ranges for about 25 percent of GAO's employees were raised and about
10 percent of GAO's employees were determined to be paid above market
levels based on their roles, responsibilities, and/or relative
performance. No GAO employee has had his or her pay cut as a result of
GAO's classification and compensation changes. Still, GAO's approach to
market-based pay and related Band II restructuring efforts, which were
very challenging and likely unprecedented in government, have been the
source of considerable attention and some controversy.

GAO seeks to assist the Congress in improving the economy, efficiency,
effectiveness, ethics, and equity within the federal government. The
Comptroller General considers these important principles in connection
with all of his decision making relating to GAO. Furthermore, because GAO
audits, investigates, and evaluates others, it seeks to "lead by example"
in every major management area, including the human capital area. GAO
fully appreciates that it is not perfect and never will be, but it strives
to do what is right and to continuously improve.

While GAO's transformational human capital changes have required some
difficult adjustments, they, along with other key reforms, have helped GAO
to achieve record results for the Congress. Furthermore, GAO has continued
to achieve very positive results with its key people measures. For
example, on the basis of the results of GAO's latest employee feedback
survey, which was conducted after its classification and compensation
changes and Band II restructuring effort, GAO was ranked number 2 among
large federal employers in the most recent "Best Places to Work in the
Federal Government" rankings.

GAO is possibly the first major agency to implement broad banding,
market-based pay, and skills-, knowledge-, and performance-oriented pay
systems on an agencywide basis. This is a major accomplishment, and GAO's
reforms have been the subject of many positive case studies and articles
by various external parties on how to achieve tough transformation changes
within the federal government.

Nonetheless, the Comptroller General regrets that there were certain
expectation and communication gaps that occurred in connection with GAO's
initial implementation of market-based pay ranges and related
across-the-board pay adjustments in 2006. GAO has, however, taken numerous
steps to address this matter over the past year so that any such gaps
should no longer exist. Furthermore, the Comptroller General believes that
all of GAO's actions have been fully consistent with the law and
principles of economy, efficiency, effectiveness, ethics, and equity.

GAO has taken steps in the past year to provide additional opportunities
for pay increases to many employees. In addition, GAO will soon submit
legislation that will seek to enhance the pay and pension provisions
applicable to its employees.

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